By Anuja Date:
Environmental Auditing is emerging as a vibrant profession in India. Auditors are usually Environmental Engineers, Environmental Science Graduates or other professionals who have completed training in instruments like ISO 14000 or OSHAS, etc. Multinational companies like TUV Nord/Sud, KPMG, etc. apart from regional ‘environmental consultants‘, ‘environmental laboratories‘, ‘risk assessment‘ companies are entering into the business of ‘Environmental Auditing’. Many private and public institutions too conduct Environmental Auditing and Impact Assessment studies (NEERI, MITCON, JNU, CES, IDFC, TERI, etc.)
Conducting Environmental Audits first began in India after a notification in 1993 under the “Environment (Protection) Act, 1986“, which made its mandatory for all ‘polluting industries‘ (tanneries, distilleries, chemical, etc.) to annually submit an ‘Environment Statement’ to the State Pollution Control Boards. A further notification was released giving the “Environmental Standards” to be met by ‘polluting industries‘. Initially most industries were extremely unenthusiastic about following these conditions and in the first year only 2000 industries actually submitted their statements. However, the notification has gained importance by 2012 and many industries now submit their Environmental Statements annually. One of the steps initiated by many State Governments to ensure the implementation of the notification was taking a bank guarantee from industries prior to setting up of plants and issuing clearances only on the submission of Environmental Statements.
In the post-Kyoto Protocol times, other forms of environmental auditing also gained importance whether it be Carbon Disclosures, Sustainability Disclosures, or energy auditing. Most of these reports have been initiated by industries themselves and such kind of reporting is also gaining pace each year. Some studies have revealed that ‘sustainability reporting‘ attracts multinational investors and clients which is perhaps a motivating factor for industries and corporations for preparing such reports.
While these ‘on paper‘ facts are quite encouraging, an important point of departure is the way Environmental Audits are conducted.
The main problem lies in the notification itself. Preparation of ‘Environmental Statements‘ is limited to a set of ‘hazardous and polluting industries’ as mentioned earlier (numbering to around 75 odd kinds of industries and about 100 processes). However, there is evidence that supposedly “mild” or “benign” industries and processes like construction, small scale industries, canning/ bottling, mineral water, agro/forest processing industries, tourism and entertainment, sand mining in river beds, software, etc. too create significant environmental impact. Environmental clearances for such industries should also be made mandatory.
Secondly, the environmental standards set up by the CPCB through the “Schedules I -IV” relate exclusively to the ‘emissions/effluents‘. There are no standards or limits on resource use and optimization (if there are such caps/limits they are not under the purview of the EPA). Such ‘standards‘ therefore lose out on the increasing efficiency in resource-use by industries or corporations. There are no incentives or disincentives in place for reducing extraction of resources or optimizing their use. This actually translates to “appropriate as much resources as you can as long as you ‘promise’ to clean up the act“. It wont be wrong to say that such a stand allows wastefulness, if not actually motivate it.
In most auditing processes, it is expected that the Auditor should be a third party assessor who has no personal stake in the industry being assessed. However, in the current situation, the Auditors are appointed by the industries or in other words the industry becomes a ‘client‘ of the Auditor and ‘keeping the client happy‘ becomes the mandate. The auditors role is reduced to ‘getting an Environmental Clearance’ from the concerned State Pollution Control Board.
There is also a dearth of domain specific expertise in the State and Central Pollution Control Boards in order to assess the continuously evolving technologies in the Indian industries. It is obvious therefore that the annual audit statement submitted by the industrial units is only a ritualistic exercise. The Working Group Report of the Planning Commission (2012) on ‘Environment‘ states that most Environment Statements ‘..do not report any violation on account of any environmental parameter…‘ which itself reflects the shoddy work of Environmental Auditing.
These Environment Statements submitted by corporations are not available for public scrutiny and giving Environmental Clearances rests entirely in the hands of the bureaucrats in the SPCBs/ CPCB. This creates ample space for corruption and faking in the Environmental Statements. It is no wonder therefore, that even after 20 years of the notification and setting up of standards, we have still not managed to have environmentally accountable industries.
In the run up to 2020, when India will become liable to emissions’ control and carbon taxes, we must pull up our socks and develop a process through which the loopholes in the environmental clearances and reporting are addressed and overcome. We must ensure that the standards are met, excelled and newer benchmarks are reached by our industries and corporation in terms of environment protection and conservation.
One of the mechanisms I would personally want is the registration of ‘Environmental Auditors‘ and the creation of an ‘Environmental Auditing Cell’ in a similar fashion as the “Institute of Chartered Accountants of India“. Creation of such an institute/ organization will not only create a lobby group but also encourage research and communication amongst Auditors. Peer-level accountability and competitive assessment will also be established through the ‘Auditors Cell‘. Both the Government and the Industries will also be assured about the reliability of the reporting. A mechanism and criteria for ‘registration‘ as an Environmental Auditor could also be set.
Similarly, there must be a space created for participation of Civil Society groups and citizens to critically evaluate and respond to the Environment Statements submitted by the industries. In fact this should be top priority in terms of Environmental Auditing. After all, transparency is the key principle in all auditing processes.
Thirdly, standards must be revised, updated and consolidated every year. They must be systemic like the (ISO/ OSHAS Standards) and not only related to ‘emission/effluent‘ control alone. Life Cycle Assessments of products must be made mandatory.
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